Lerner Company Had the Following Transactions in 2013, Its First

question 72

Multiple Choice

Lerner Company had the following transactions in 2013, its first year of operations. • Issued 20 000 ordinary shares. Shares were issued at $14.00 per share.
• Issued 1 000 preference shares at $100 each.
• Earned net profit of $35 000.
At the end of 2013, what is the total amount of Shareholders' equity?

• A)$415 000
• B)$380 000
• C)$120 000
• D)$260 000

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold based on the average cost of all items available for sale during the period.

Cost Reconciliation

Cost reconciliation is the process of analyzing and adjusting the differences between the actual costs incurred and the standard or budgeted costs to understand variances in manufacturing or production activities.

Process Costing

Process costing is a method of costing used by companies that produce similar or homogenous products, where costs are accumulated over a period and then allocated to units of product.

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit of inventory, calculated by dividing the total cost of goods available for sale by the total units available.